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I Believe the Saga Ship is finally turning Starboard !
As I've said a number of times on this site I have been a shareholder in SAGA since June 2019.
I initially bought in when the shares tanked after Lance Batchelor issued a profits warning !
The investment case appeared to be solid as SAGA had a very profitable insurance business making 100M+Net Profit ,
New Cruise Ships arriving soon and a 8,500,000 Database of "Grey Tops!" who have most of the UK's wealth.
SAGA share price on 20th June 2019 was 452p !
Well that solid investment case didn't consider;
1. A Pandemic which started in China in late 2019 arriving in the UK early 2020 and BOJO locking down the whole country on 23rd March 2020.
2. Interest rates starting to rise in December 2021 and rising 500% !
3. Russia invading Ukraine in February 2022
4. Inflation hitting 11%
5. Second Hand Cars and Car Parts rocketing in value.
SAGA's business was crippled !
To make matters even worse SAGA had appointed a new CEO Euan Sutherland who proved to be a liability.
I believe the only good thing he did was bring back RDH as a major investor and Chairman as part of a 15-1 share split and rights issue that effectively saved the Company.
The last 5 years has been wealth destruction for most of SAGA's shareholders.
I have been buying the substantial dips and actually broke into profit in June 2021 ( No I didn't sell !)
I continued to buy the substantial dips as Covid ended and War broke out and inflation raged.
I actually bought more yesterday... Why you ask ?
SAGA have a new CEO who is already making positive changes to the businesses.
The Cruise and River Cruise business have just posted Good profits and 2024/25 bookings are very good.
Travel is finally making a profit and the new tours and packages are selling well.
The Motor Insurance market is slowly returning to normality and we will see more A&M activity which should result in the disposal of SAGA Motor Insurance.
SAGA are generating CASH. 74.5M was paid off debt last year.
Cash at Jan 31st was 169.8M with an undrawn RCF of 50M and an undrawn 85M facility from RDH
The 150M bond will be repaid in May.
Current trading and revised forecasts suggest the company will generate 85M+ Free cash flow in 2024
The Debt is now manageable and interest rates will start to fall later this year.
The Tide is finally turning !!!!!
Best Wishes
I saw it to seel Billzo, I was waiting also. Had some at 103 in the end....
Aspers.
Maybe tell us your thoughts on the remaining value of goodwill on the balance sheet against insurance. Bearing in mind insurances current position. DO you think its justified and do you see it being reduced further again next time around...
Or just carry on the cheap insults if you prefer obvs....
It went to a £1 you clown
Bilzo…….please tell me what you are smoking. If you are waiting for a £1 entry you will be waiting for a long time. Just keep smoking the weed though, you will be fine.
This would be funny if he had not done such a bad job as a CEO:
https://www.investorschronicle.co.uk/news/2024/04/16/saga-superdry-ag-barr-meausring-a-ceo-s-progress/
Mike Hazell is so much better, but is it too late?
Watched the presentation and the key thing is the 3 year policy damage due to rampant motor insurance cost inflation should be cleared out by the end of the year.
Hopefully this CEO can make a good deal unlike the previous one
I have lost a lot on this share but not given up on it. Saga is one of about 5 companies that us 'mature' people check at car/house insurance renewal time. It's a competitive market and yet premiums are up a lot reflecting the ripoff charges that large garages and car manufacturers get away with. Insurance is not really optional but they need to get their pricing right and understand their customers.
The cruise business is still growing, based on current projections on occupancy and per diems the PBT is likely to double in the next 2 years. The current year PBT would have been 5.9m higher if not for what happened in November.
More like treading water. Taken in isolation the cruise division is the stand out performer, with underlying PBT of £35.5 million. Apply a multiple between 10 to 12 to that and the cruise division is worth less than the net debt of £637.2 million. It’s a dog’s breakfast of a company, and the SP is reflecting that. We’ve removed it from our spreadsheets and just written it off.
Like one of it's ships, this looks as though it's starting to get on the right course - albeit very slowly and hopefully no covid iceberg ahead.
Their travel business is a joke, 1.5m profit on 150m of revenues in a good year. In a bad year like COVID they were be losing 20-40m a year. Someone explain to the BoD the concept of risk adjusted returns. Their cost base is disproportionately high for such a tiny business.
I suppose the numbers aren’t too bad although it does appear that Uncle Roger must dip again into his very large pockets.
The last I heard was that Saga had set an April deadline for their “strategic initiatives broadened to include potential partnerships that could support growth”, another woolly and unsubstantiated promise of jam tomorrow. Meanwhile the man from the Middle East may have jumped overboard and swum to more welcoming waters. Who could blame him?
The market is not impressed and neither am I.
Gotta love a Switch Billzo!?:)
It’s taken a while but nearly at the £1 entry point
I suppose the house broker is going to be positive. The corollary of crystalising assets and reducing debt is to replace interest payments with rental costs for those big shiny ships. I can’t imagine Saga getting back to declaring a dividend. That’s got to be a drag on the sp. Meanwhile the company wastes money on something called Cruise Radio and the likes of Mr Motivator and his associates. All rather Pontins, and unnecessary for what is a respected brand. I don’t know anyone who wouid choose a cruise company because it has a radio station that reads out requests and dedications, or a celebrity keep fit class.
house broker update
saga (buy, tp: 175p) material cash beat. strategic focus on partnerships.
underlying pbt of £38m is slightly ahead of consensus of £37m, with no significant surprises within the components given key operating metrics were pre-announced in january. that said, cash of £170m has come in materially better than guidance of £135-145m due to a £10m one-off release from travel and favourable cash flow timing and working capital movements. consequently, net debt of £637m is less than consensus of £660m, with nd/ebitda leverage of 5.4x versus consensus of 5.8x. guidance for the current year is for underlying pbt to be broadly consistent with £38m just reported, which is below previous consensus of £46m due to investment in price and acquisition costs to stabilise insurance broking policy volumes (previously ***ged but now indirectly quantified). saga says early signs indicate the remedial insurance strategy is delivering the expected benefits. the travel businesses continue to perform very well, with strong bookings data for the year ahead. strategic initiatives have been broadened to include potential partnerships that could support growth in both ocean cruise and insurance, in addition to achieving the previously announced objective of reducing debt by crystalising value.
consensus. buy tp £175p
60.5% upside
At under 106p
Saga turned down a private equity takeover in October for 220p..They stated is grossly undervalued the company..lol
🤣🤦🏼♂️
Say what you will about Saga plc,but the fact remains that there has been no director buying since Oct 2022.. Meanwhile over same period,directors have awarded themselves million of nil cost shares..This says it all about the company...Shares are down today, because of no news regarding sale,or partner for the cruise ships,in order to bring down high debt levels.
Reasonable update, but of course the market gives no credit and the sp falls...
Only a 10% reduction in net debt is perhaps a tad disappointing.
Many oldies like me have spare cash from property selling. Happy to sail with SAGA. cheap
ZCCAX77 You are correct about the price gap between P&O and Saga. But we’ve come across many former P&O regulars who have become Saga regulars. They dislike the new large ships, and bemoan the decline in P&O’s standards. Saga is almost certainly too expensive for most cruise customers, but there is a significant number who have the means to pay.
Yes looks encouraging to me. Topped up at the opening at 107p.
Going to take time for the improvments to feed through but every prospect of strong rises over 18 months given patience.
Well the results are in. Obviously a big improvement over the year, but how does the market interpret that. It's still a big loss, despite high rates of occupancy and the big improvement. Debt down, leverage down, revenues up, operating cash flow up. Encouraging, but still a loss. I have no investment here, but am interested in potential read-across to other companies.
Fabulous update, this really is a bargain now at these present levels. Top up time for me today once the market settles to the news.